Do you have a mortgage? (Tax deduction may be ending)

[Bene505]

Do you have a mortgage on the boat? That is, a loan on the boat where the boat is the collateral on the loan? (If you don't pay, they take the boat.)

With the feds proposing an end to the mortgage tax deduction, this may affect us sailboat owners. You can deduct a sailboat if it has a stove, head and bed.

So how about it, do you have a mortgage on your boat?

(Also how long is it? -- since I'm curious about any correllations between the length of a boat and a mortgage.)

Regards,
Brad

[Edited: corrected the 3 requirements. They are: cooking facility, sleeping facility and a head.]

[Bene505]

8 votes already. Nice. That was quick.

Regards,
Brad

[jackytdunaway]

i voted yes on the mortagage but then after reading your posts may have voted wrong. i have a boat paid for with a mortagage on the house

[remetau]

We bought our boat with the money from selling our house.

[brokesailor]

How do you get a mortagage on a boat besides a home equity line of credit?

[Tempest]

I really don't believe there's an " elected" offical in D.C. that would have the political will to do this for Home Mortgages. I could see where they might try it for Boats and RV's.

The folks that recommended it are " retired". Any one who voted for eliminating deductions for Home Mortgage interest would be looking at retirement too!
( possibly to another country) :-)

[PalmettoSailor]

Originally Posted by brokesailor

How do you get a mortagage on a boat besides a home equity line of credit?

I assume he means a boat loan with the boat as collateral.

When we first purchased our boat, we took a loan for about 1/2 the cost of the boat. At the time the interest rate was pretty low and I felt I could manage a better rate of return leaving my other assets where they were.

We did deduct the interest on the boat for a few years under that arrangement. After the economy tanked, we re-evaluated our situation and decided to do a cash out refi on our house. We took enough out to payoff the boat which was already deductable and another sizable loan that was not. The house payment is now $200/mo less than the combined payment for the 3 loans, all our interest payments are deductable and we have a 15 year loan on the house which effectively extended our payments only one year and best of all still have somewhere around $200k equity in the house, so we're in a pretty good place.

I voted 36' with no mortgage to reflect the current situation.

[Bene505]

Originally Posted by jackytdunaway

i voted yes on the mortagage but then after reading your posts may have voted wrong. i have a boat paid for with a mortagage on the house

Yes, I changed the title and wording to say "on the boat". Should have been more clear on that. Also added the part about the boat being the collateral on the loan.

Originally Posted by brokesailor

How do you get a mortagage on a boat besides a home equity line of credit?

A loan on the boat is a mortgage, as in borrowing money from a bank and using the boat as collateral on the loan. (If you don't pay, they take the boat.)

If that is the case, and the boat meets the 3 criteria, then it can be considered a second (or 1st) home and the interest on the loan is tax deductible. Quoting from this site:

"For tax purposes, many boats qualify as second homes just like land-based vacation condos and mobile homes," said Elaine Dickinson of BoatU.S. Government Affairs. "If you have a secured loan on that vessel, the IRS allows a tax deduction on the interest paid on the loan."

The IRS defines a second home as having "basic living accommodations such as sleeping space, toilet and cooking facilities." A secured loan is one where a lending institution holds the boat as collateral for the loan.

Regards,
Brad

[SEMIJim]

Originally Posted by Tempest

I really don't believe there's an " elected" offical in D.C. that would have the political will to do this for Home Mortgages. I could see where they might try it for Boats and RV's.

The way I heard it on the "news" this morning is they're talking about eliminating the home mortgage interest deduction on homes valued in excess of $250k and on second homes.

This is all part of a first-draft proposed U.S. Federal deficit reduction plan. There's something in there to anger just about everybody. IIRC: Federal workforce reductions in size, compensation and benefits; increase in retirement age; decrease in Social Security benefits; decrease in spending on the military; reduction in or elimination of farm and other subsidies; elimination of tax "loopholes," and so-on and so-on.

People may not like it, but it has to be done. Americans, individually, and our government entities at all levels are spending way beyond our means. People can bury their heads in their... uh... in the sand and pretend it ain't so, but that isn't going to change the fact that it is so. The longer we put off addressing it the more painful will be the inevitable correction.

Jim

[PalmettoSailor]

Originally Posted by SEMIJim

The way I heard it on the "news" this morning is they're talking about eliminating the home mortgage interest deduction on homes valued in excess of $250k and on second homes.

This is all part of a first-draft proposed U.S. Federal deficit reduction plan. There's something in there to anger just about everybody. IIRC: Federal workforce reductions in size, compensation and benefits; increase in retirement age; decrease in Social Security benefits; decrease in spending on the military; reduction in or elimination of farm and other subsidies; elimination of tax "loopholes," and so-on and so-on.

People may not like it, but it has to be done. Americans, individually, and our government entities at all levels are spending way beyond our means. People can bury their heads in their... uh... in the sand and pretend it ain't so, but that isn't going to change the fact that it is so. The longer we put off addressing it the more painful will be the inevitable correction.

Jim

Probably need to take this to another forum, but even though I depend on the Government for my paycheck (contractor) and I totally agree with you.